http://www.nybooks.com/articles/18931
The New York Review of Books
Volume 53, Number 7 · April 27, 2006
Review
The Global Delusion
By John Gray
Globalization and Its Enemies
by Daniel Cohen, translated by Jessica B. Baker
MIT Press, 192 pp., $27.95
How We Compete: What Companies Around the World Are Doing to Make It in
Today's Global Economy
by Suzanne Berger and the MIT Industrial Performance Center
Currency/Doubleday, 334 pp., $27.50
End of the Line: The Rise and Coming Fall of the Global Corporation
by Barry C. Lynn
Doubleday, 312 pp., $26.00
1. For the past two centuries leading social theorists have believed that
modern development can have only one outcome. In the nineteenth century
Karl Marx, Herbert Spencer, and Auguste Comte asserted that the advance of
science and technology was leading to a single type of social organization,
and unless modern societies foundered in a reversion to barbarism they were
bound to converge in a global system. There was wide disagreement on the
nature of the system that was coming into being. According to Comte it
would be a kind of technocracy, while Marx believed it would be egalitarian
communism and Spencer laissez-faire capitalism. In each case it was a
version of industrial society that enabled scarcity in the necessities of
life to be overcome. Despite their different political visions these
thinkers were at one in assuming that with the advent of industrialization
prosperity could be ensured for all. Once this had been achieved, war would
cease and a universal economic system would replace the diverse and
conflicting regimes of the past.
Similar beliefs shaped the thinking of many twentieth-century social
theorists. In the Thirties F.A. Hayek resuscitated a version of Spencer's
theory of the free market as the endpoint of social evolution, while Sidney
and Beatrice Webb believed an early version of the universal society of the
future was embodied in the Soviet Union. During the Sixties theorists of
the "end of ideology" such as Daniel Bell anticipated that centrally
planned economies and market-based affluent Western societies would come
together in a managerial mixed economy. Toward the end of the century the
idea became fashionable that societies everywhere were embracing
"democratic capitalism."
None of these expectations has been borne out by events. Industrialization
is spreading everywhere, but at varying rates of rapidity and with
disparate consequences. As in the past, societies are developing in widely
different directions. In parts of the world the state has foundered and
been replaced by anarchy; in others authoritarian regimes remain strongly
entrenched. The former Soviet Union converged with the third world rather
than the affluent West and has been replaced not by liberal democracy but
by a hyper-modern version of traditional Russian authoritarianism.
Versions of liberal democracy have spread into parts of the former Soviet
bloc, but in Iraq democracy is producing a type of elective theocracy not
unlike that which exists in Iran. China has abandoned central economic
planning for a type of state capitalism closely linked with nationalism.
Some countries are moving toward market reform and others in the opposite
direction. Europe has opted for a combination of social democracy with a
neoliberal economic system, while under the Bush administration the United
States has tilted toward a mix of protectionism, an unsustainable federal
deficit, and crony capitalism.
Though the world's diverse societies are continuously interacting, the
proc-ess is producing a variety of hybrid regimes rather than convergence
on a single model. Yet a belief that a universally accepted type of society
is emerging continues to shape the way social scientists and public
commentators think about the contemporary condition, and it is taken for
granted that industrialization enables something like the way of life of
rich countries to be reproduced everywhere.
The assumption of convergence is evident in theories of globalization. In
The Borderless World (1990), the influential management theorist Kenichi
Ohmae declared:
[The global economy] is becoming so powerful that it has swallowed
most consumers and corporations, made traditional national borders almost
disappear, and pushed bureaucrats, politicians, and the military toward the
status of declining industries.[1]
Ohmae's work embodies what may be called the business-utopian model of
globalization, but the idea that national systems of government are
becoming marginal is shared by theorists of cosmopolitan governance who
believe that powerful new supranational institutions are emerginga view
that is no less unreal. Similarly anticapitalist movements are based on the
premise that the divergent patterns of development of the past have been
replaced by a new, repressive global system. Supporters of globalization
and many of its critics assume that it creates similar conditions wherever
it spreads. Whether they welcome the prospect or resist it, both accept
that global market forces are forcing societies onto the same path of
development.
In Globalization and Its Enemies, Daniel Cohen, a professor of economics at
the École Normale Supé-rieure in Paris, provides a refreshing antidote to
some of the most misleading features of this consensus. His starting point
is the seemingly paradoxical claim that for most people in the world it is
not a reality but a mirage. As Cohen sees it, the ongoing wave of
globalizationthe third in a series that began in the sixteenth century
with the conquistadors and continued in the nineteenth with British
imperial free tradeoccurs largely in a realm of virtual reality and leaves
much of everyday life untouched. Nineteenth-century globalization involved
large-scale movements of population to new lands, while the present phase
involves mainly commodities and images.
"Today's globalization," he notes, "is 'immobile.'" Goods are produced and
marketed on a planetary scale but those who live in rich countries
encounter other societies chiefly through television and exotic vacations.
There are politically controversial migrations of poor people from the
Middle East and Africa to Europe and from Mexico to the United States, but
immigrants still make up only around 3 percent of the world's population
today, whereas in 1913 it was about 10 percent. Again, trade has expanded
greatly in the past thirty years but a great deal of it occurs between rich
countries. The fifteen longstanding members of the European Union make up
around 40 percent of global commerce, but two thirds of their imports and
exports are traded within Europe itself. As Cohen puts it, "in wealthy
countries globalization is largely imaginary."
The belief that financial globalization is promoting economic development
in poor countries is also delusive. Global financial markets have few
incentives to equip poor countries to be globally productive. It may be
profitable to computerize a grocery store in New York, but in Lagos
customers are too poor to pay the prices required by such investment. The
result is that technology is very unevenly diffused, and the poor stay poor.
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